Staying the course

Sources: © 2021 – Morningstar Direct, All Rights Reserved1, and Wells Fargo Investment Institute. Annual data from January 1, 1980 to December 31, 2020. For illustrative purposes only. Severe intra-year corrections do not necessarily indicate subpar performance for the calendar year. Analysis was compiled using the daily price of the S&P 500 Total Return Index. The S&P 500 Index is a market capitalization-weighted index composed of 500 stocks generally considered representative of the U.S. stock market. Calendar year drawdowns represent the largest market drops from peak to trough for each year. Investing in stocks involve risk and their returns and risk levels can vary depending on prevailing market and economic conditions. Index returns do not represent investment performance or the results of actual trading. Index returns represent general market results, assume the reinvestment of dividends and other distributions, and do not reflect deduction for fees, expenses or taxes applicable to an actual investment. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. All investing involves risk including the possible loss of principal.

1. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Key Takeaways

  • A severe market downturn does not necessarily mean that markets will perform poorly for the year.
  • Market corrections and downturns can be difficult to endure. However, they can offer opportunities for investors to purchase high-quality stocks at reasonable prices.